Marketing Research: Challenges and Opportunities in India

Dr. Payush (Associate Professor GITAM)

Marketing research is the first important step that a marketer has to do before creating marketing plan and
launching a product or service domestically or internationally. Knowing that creating an effective marketing
strategy will help identify the target customer needs then find ways to capture the intended customer's attention
with a unique value proposition and finally get the customer to perform the intended action. Marketing research
requires company to spend resources to obtain in many different research activities such as marketing testing,
surveys, finding out more data and statistics. There are primarily two types of marketing research, primary data
research that a business can do itself or hire someone to perform. This data is collected specifically for the purpose
at hand and is customized for your business. Marketing research is the planning, collection, and analysis of data
relevant to marketing decision making and the communication of this analysis to management which provides
information to make better decisions at every stage of marketing plan strategy. Emerging markets are different
from mature markets; emerging “Growth” markets have less stable political environments and economies than
more mature markets. However, they do have some level of maturing public infrastructure that enables technology
adaptation. “Truly” emerging markets have an additional set of challenges because they tend to be limited by a
number of factors such as regulatory issues, lack of infrastructure, or political unrest or corruption – all of which
tend to breed software piracy, bigger white and gray box markets, and even greater lack of brand loyalty due to
price sensitivity (Jonathan, 2011). Primarily due to these differences, conducting marketing research in emerging
countries still comes with new and sometimes unexpected challenges.

Marketing Research in India:

The marketing research industry in India is about 36 years old and its turnover is about INR 325 cores. In the
last few years, the market has been growing at about 10% annually. Marketing research in India has been
focused more on fast moving consumer goods (FMCG). Besides, the most significant growth area for the
marketing research industry in India is the media measurement business. Next would perhaps be the auto,
telecom, healthcare sectors, and durable goods industries. Customer satisfaction and customer insights in all
industry sectors are the growing segments for market. Large companies are spending anywhere between $5
million to $100 million on marketing research these days. It has been posited that research expertise available in
India is truly top of the rung, and methodologies used in India are comparable with the best in the world
(Abraham, 2004). And 4 this is part of the reason that India is heading towards becoming an outsourcing hub in
market research for the rest of the world. But where India is falling behind is in the area of use of technology for
data collection. That is because most of the technologies used for data collection in the advanced world today
are internet and telephone based. With low internet penetration and tele-density, Indian marketing research
firms have to rely on face-to-face interviewing along with paper and pencil method of data collection. The
market for rendering outsourced marketing research services seems to be growing in the country. Marketing
research in India is a monopolistic business, with each sector mostly having one, and occasionally two, players.
For example, there's Nielsen in FMCG, GfK in consumer durables, IDC and GfK in mobile phones, and Gartner
and IDC in computers, to name a few sectors (Kumar, 2011). They conduct a retail audit within a sample of
outlets to arrive at market shares by brand, category and geographies. Companies source this data to see how
they are doing in comparison with the competition and to shape their business responses. When issues arise,
resolution entails a diplomatic touch, sometimes gentle, sometimes firm. And issues related to two key aspects
are common: representation of new product categories, and variation between internal numbers and external
estimates. There is a growing client-side demand for research and the trust-level of Indian researchers is
increasing. The current business model is of low-cost, high-volume but this is changing with the advent of
MRO (Market Research Outsourcing) and KPO (Knowledge Process Outsourcing). The overall market gets
divided into full services Market Research agencies and the KPO Services clocking around 18% of CAGR
(Source: Industry Estimation - 2010). During the last couple of years there has been a consolidation between
Market Research agencies in their scale of operations and data management practices. Virtual captive centers
and offshore partnerships drive the low- and high-end of research in India: from coding and data entry, through
to Data Analytics and Business Intelligence.

There are some common guidelines suggested for conducting marketing research in India (Steinbach and Weil,
2011):

 Try to keep any consumer research simple. Interviewing is not a highly skilled and valued employment
option in India. One can operate in this space if you can read and write (especially in English). Additionally,
“street interviewing” is not always reliable. Therefore, quality issues are a constant challenge, especially for
complex concepts.

 English is the language of business, but there are more than 16 distinct languages among consumers
and many additional dialects. Therefore, selecting local moderators and interviewers familiar with several
Indian dialects is a necessity. The moderators must be fluent in the language selected for the group or interview.
In addition, project leaders must make sure each respondent is fluent in the selected language or dialect.
  Privacy concerns about the home environment means that many people will not want to do in-home
interviews. However, research in India should be held in spaces that are most comfortable for the participants.

 Because of traditions held with regards to class, gender, and age, qualitative focus groups in India are
typically designed with as much homogeneity as is possible, which helps the participants feel comfortable and
thus, allow one to gather useful responses.

 Do not assume that all Indians are interested in following the developed world’s model. Many are
actively mixing traditional and modern values.

 Many local clients are extremely cost-conscious despite quality risks and other compromises.

 Corruption in the public sector is common and cash payments to “oil wheels” at any level may be requested.

 Good proposals can easily fail because of hidden relationships and alliances within clients and competitors.

 Metro dwellers are the primary consumers, and they typically are younger, educated, modern and
westernized.

For many companies, the rural masses will not be relevant, but if they are, they will be poorer, more
conservative and traditional. However, there are some conflicting reports from different sources about which methods
of data collection (telephone vs. online vs. in-person interviewing) are most convenient and effective in India. Lehardy
and Ryan (2001) state that in-person interviewing is the most effective way to collect information, while Steinbach and
Weil (2011) assert that “face-to-face and in-person groups often are difficult because of varied travel times within the
major metro areas. In order to resolve such conflicting recommendations and to get a quick feel for the nature of
marketing research operations in India, an exploratory investigation involving content analysis of web sites by various
research agencies was proposed.

Opportunities In India :

India has a vast collection of trained knowledge professionals who can supply companies with
data processing, analysis and reporting, which is the reason why it is the favored outsourcing
destination for market research.

Another reason is cost: many companies have seen their market research costs fall by 40-60
percent after outsourcing to India. These companies provide the same services as those in the
US: helping companies develop a holistic understanding of marketing programs, market niches
and consumers.

Many industries are now taking a serious look at the rural markets. Close to seventy percent of
India’s population (742 million), live in rural villages, while only 285 million live in urban areas.
The rural market has been growing five times as fast as the urban market. The problem with rural
marketing is the cost, which can be prohibitive due to the vastness of the country. In addition,
there are large areas and groups of people who have remained beyond the recent technological
breakthroughs, and they will be harder to reach on several levels.

With the wide range of market research firms doing business in India, it’s not hard to find one
that’s a good fit from an industry perspective. It’s also easy to find white papers and industry-
related publications, and many industries have associations that one can become a member of.
Emergence of new age sectors like Telecom, Media (Digital) & Insurance are helping the Market
Research Industry to climb to new heights with varied analysis of Consumer Insights. The
Overall Market gets divided into full services MR agencies and the KPO Services clocking
around 18% of CAGR(Source: Industry Estimation). During the last couple of years there has
been a consolidation between MR agencies in their scale of operations and data management
practices. No wonder despite all these, India still becomes the popular destination for the MNC
based research agencies since there is untapped potential of new sets of consumers with an
opportunity to serve huge population. MR Team (Part of Advertising Agency during 70’s) moves
from the boardrooms of Consumer Durable or FMCG companies into the boardrooms of every
sector of the economy firms having a project to project assignment system where in they do the
piecemeal job i.e. data collection and not the analysis which is done at the client side. Also
adding the factors like communisation of the information and the proliferation of smaller firms
have led the industry not being able to get out of the talent-price circle. To get rid of this problem
many MR Firms like TNS, Synovate or Nielsen is planning to arrange their own sets of training
to fresh graduates for the industry. Nielsen has opened up its training centre near Mumbai with
two years curriculum in the field of Market Research, similarly TNS is hiring from various
backgrounds to notch up its mid-level research function. In the last couple of years the Industry
has also seen the emergence of new sets of players namely Analytics, Data Mining or
Warehousing firms like Absolutdata Systems, Annik Systems, and Datamation. Many of these
firms earlier were Knowledge Process Organisations (KPO’s) who served foreign clients and
 now turning up to cater the local demand. There is another set of genre which has emerged
during the past few years like HP Decision Analytics Firm or IBM Business Decision Centre or
McKinsey Strategic Research Division providing their research based services to their parent
companies adding values to their strategic teams. In fact what has been observed also in the past
that many IT giants like Oracle, Microsoft has started expanding their own research resources
within their marketing team for providing critical inputs on consumer behaviour to their strategic
group. It is also observed that the consulting firms like PwC or Ernst & Young or KPMG has
started advising their clients in giving them the end to end solution from sharing the market
insights to conceptualization of idea’s to product designing and in turns creating lot of problems
for the full service market research agencies to hold their clients.

Challenges in India:

India faces unique, complex challenges because it can be viewed more as a continent than a country. This is
because of many diverse cultures, customs, behaviour, languages, and even regional dialects. In India, one size
does not fit all. Researchers need to understand the cultural nuances peculiar to different parts of the country
when designing surveys and studies and selecting local markets. To obtain data for nationwide studies, market
research firms in India have to target multiple cities, each with its language and cultural nuances. While Indian
market researchers understand and know how to work within the complexities, it becomes challenging to
warrant the high costs of conducting national studies to clients. On the plus side, this has helped Indian
researchers attain higher standards of conducting studies. However, it is also true that it is difficult to attract
high-quality research talent in India due to relatively lower salaries. While Indian companies understand the
importance of Market Research and use it effectively, they are amongst the most demanding but lowest paying
countries for market research. One of the biggest challenges is the size of the country. In the past, with fewer
households having access to phones, it was challenging to conduct market research. In 1997, less than one
percent of the population had access to a telephone, and with low literacy rates, telephone and mail surveys
were non-existent. However, in recent years, technology has lifted many barriers to market research in India.

India’s digital journey has been remarkable. The number of internet users grew from 0.62 million in 2010 to
843.06 million in 2021 (the second-largest in the world). Estimates suggest that this figure would reach over 1.5
billion by 2040, and Smartphone usage far surpasses desktop and laptop usage. Today, smart phones are present
in 84% of households.
These developments are a massive advantage in a country the size of India because the cost savings from using
the internet or phone over face-to-face interactions are enormous. The rise in social media usage has also
immensely helped the growth of market research in India. Face-to-face research was dominant before the
pandemic; however, the first wave of COVID-19 pandemic and the lockdown helped speed up digitization,
making it easier to use technology and social media for research studies.

Market Research is changing and that too from its early days of data collection (Pen n Paper Method) to
technically prowess devices like PDA’s, mobile phones & in-built camera’s which can record exact state of the
matter of every interview. At the same time, MR has become more of a commodity rather than delivering
differential value to the end consumer. Still MR is being performed in mega cities and towns rather than
pushing it to the rural economy which undoubtedly is the next biggest growth opportunity in our country for all
the products/ services. MR industry is also facing a crunch in having the right kind of people skilled with a good
training background to understand the nitty gritty of the clients brief. Moreover, today’s most of the research
work is being covered with a regular monitoring job like tracking, audience measurement, syndicated studies
etc rather than with a specific problem. Another eaten away factor could be the nature of the industry which is
fragmented and largely being driven by price factor worrying clients ranging from product’s to service industry.
As a result, absence of talents due to low price factor has resulted in MR

Conclusion:

The IT enabled market research is a new trend which propounds ways to maximize an enterprise’s returns in the
newly emerging liberalized market in India. Now is the time for the MR agencies to reap the ever growing and
burgeoning customers with rapidly changing lifestyles through research work, so that Indian Marketers could be
more productive, result oriented and globally the best workforce to cater the demands of their consumers
Various factors such as consumer attitude, values, change in consumer behaviour and lifestyle can be easily
ascertained with the help of information systems rather than solely relying on surveys. The economy is slowly
gathering momentum in the world of market research making the environment adapt to newer model of business
where the individual becomes the focal point for gathering data. With consumers becoming more techno savvy
and aware about the marketing questions that are asked to them, it is becoming increasingly difficult to hold the
pressure and retain their full attention. Market research firms with flexibility to adopt game changing strategies
along with an openness to integrate both the primary and secondary marketing techniques are only likely to
survive and rule the roost in the coming years.
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